The Diamond King

For years, shy little Sir Ernest Oppenheimer left aides breathless as he raced down into South Africa's mines or whisked surefootedly around the crags of high finance. "There's a special place in hell," he said impatiently, "for mining men who don't work with the deposits the good Lord has given them." Last week, a few minutes after joking with his son Harry, his doctor and his private secretary, Sir Ernest slumped over at the breakfast table with a heart attack. At 77, the "king of diamonds" was dead.

One of six sons of a German Jewish cigar merchant, Ernest Oppenheimer at his death was undisputed boss of the cartel that controls 95% of the world's diamond production, and he controlled more than 90 other companies worth an estimated $2.5 billion. His empire included coal, uranium, copper and some of the world's largest gold mines. Financially, he was the most powerful man in all Africa.

Lodes in the Veld. Ernest Oppenheimer went to South Africa in 1902 as a diamond buyer for a London firm. He was short (5 ft. 4 in.), and diffident in manner. But he went quickly and quietly about the business of learning how to mine on the veld and deal with figures in the office. Ten years later, the citizens of Kimberley, home of five of the world's greatest diamond mines, elected him mayor.

Yet it was not in diamonds but in gold that Ernest Oppenheimer got his first big break. Teaming with American Engineer W. L. Honnold, he went to London, explained the gold-mining possibilities of South Africa's East Rand district, persuaded J. P. Morgan & Co. and other firms to invest nearly $5,000,000 in their projected Anglo-American Corp. of South Africa, Ltd.

The new company prospered, but Oppenheimer was not content with gold. He liked diamonds. He spotted the possibilities in Southwest African fields captured from the Germans, and beat to the punch the stodgy starched-collared heirs of Cecil Rhodes, the legendary empire builder and diamond czar who died in 1902. Then he tackled the giant of the diamond world, De Beers Consolidated Mines, Ltd. He bored from within, buying stock on the Johannesburg exchange, share by share, until he had enough to become a director.

Lumps in the Throat. Arguing that diamond production should be held back during the Depression rather than let their value, in price and prestige, depreciate in a cheap market, he outtalked opposition directors, was elected chairman. De Beers became his. He still had to argue, cajole, charm, browbeat rivals, but he survived all challengers. At his direction, the cartel held diamonds off the market to keep prices up; it forced dealers to take lots (up to $50,000) or get none at all. But Oppenheimer successfully fought off a U.S. Government antitrust suit in 1945 on the ground that it was American dealers who "cooperated" with him, not he who told them what to do.

At his death. Sir Ernest remained a somewhat mysterious figure. His vanquished business rivals were still unsure what he had beaten them with. "Sir Ernest loved corporate assets," one mining associate recalled. "He actually got a lump in his throat describing some of them." Sir Ernest himself summed up his life more briefly. Said he: "We love diamonds with a passion you cannot understand."

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